Justia Consumer Law Opinion Summaries

Connie Lange purchased a fifth-wheel camping trailer from GMT Auto Sales in August 2020, which included a $199 administrative fee. Lange later filed a class action petition alleging that GMT violated the Missouri Merchandising Practices Act by charging this fee, arguing that fifth-wheel camping trailers do not qualify as "motor vehicles," "vessels," or "vessel trailers" under the relevant statute. GMT initially moved to dismiss the case but later moved to compel arbitration based on an arbitration clause in the retail installment contract.The Circuit Court of St. Louis County overruled GMT's motion to dismiss and later granted GMT's motion to compel arbitration. The arbitrator awarded Lange $199 and $5,000 in attorney fees. Lange then filed a motion to vacate the arbitration award and reconsider the order compelling arbitration, which the circuit court denied. Lange appealed, arguing that GMT waived its right to arbitration by filing the motion to dismiss and that the arbitration provision was unenforceable.The Missouri Court of Appeals reversed the circuit court's judgment, agreeing with Lange that GMT waived its right to arbitration. The Supreme Court of Missouri granted transfer and reviewed the case de novo. The court found that GMT did not waive its right to arbitration by filing the motion to dismiss, as it timely moved to compel arbitration and raised it as an affirmative defense in its responsive pleading. The court also found that the arbitration provision remained enforceable despite the assignment of the retail installment contract to a bank. Lange's argument regarding the unconscionability of the arbitration provision was deemed unpreserved for review.The Supreme Court of Missouri affirmed the circuit court's judgment confirming the arbitration award. View "Lange v. GMT Auto Sales, Inc." on Justia Law

James Hulce, on behalf of himself and others similarly situated, filed a putative class action suit against Zipongo Inc., doing business as Foodsmart. Hulce alleged that Foodsmart violated the Telephone Consumer Protection Act (TCPA) by making unsolicited calls and sending text messages to him, despite his number being on the national do-not-call registry. Foodsmart's communications were about free nutritional services offered through Hulce's state and Medicaid-funded healthcare plan, Chorus Community Healthcare Plans (CCHP).The United States District Court for the Eastern District of Wisconsin granted Foodsmart's motion for summary judgment. The court found that the calls and messages did not constitute "telephone solicitations" under the TCPA because they were not made for the purpose of encouraging the purchase of services. Instead, the communications were about services that were free to Hulce, with Foodsmart billing CCHP directly.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court affirmed the district court's decision, holding that the calls and messages did not fall within the definition of "telephone solicitation" under the TCPA. The court concluded that "telephone solicitation" requires the initiation of a call or message with the purpose of persuading or urging someone to pay for a service. Since Foodsmart's communications were about free services and did not encourage Hulce to make a purchase, they did not meet this definition. The court emphasized that the purpose of the call must be to persuade someone who makes the purchasing decision to buy the services, which was not the case here. View "Hulce v Zipongo Inc." on Justia Law

In August 2023, a devastating fire in Lahaina, Maui, caused significant damage, destroying over 3,000 structures and resulting in at least 102 fatalities. Numerous lawsuits were filed by individual plaintiffs and class action plaintiffs against various defendants, including Hawaiian Electric Industries and others. Additionally, several insurance carriers filed subrogation actions to recover benefits paid to their insureds for damages caused by the fires. A global settlement agreement was reached among the plaintiffs and defendants, but the settlement required either a release of all subrogation claims by the insurance carriers or a final judgment that the insurers' exclusive remedy would be a lien against the settlement under Hawai‘i Revised Statutes (HRS) § 663-10.The Circuit Court of the Second Circuit reserved three questions for the Hawai‘i Supreme Court. The Supreme Court of the State of Hawai‘i reviewed the case and issued an opinion. The court held that the holding in Yukumoto v. Tawarahara, which limited subrogation remedies for health insurers to reimbursement from their insureds under HRS § 663-10, extends to property and casualty insurance carriers. Therefore, under HRS § 431:13-103(a)(10)(A), the lien provided for under HRS § 663-10(a) is the exclusive remedy for property and casualty insurers to recover claims paid for damages caused by a third-party tortfeasor in the context of a tort settlement.The court also held that a property and casualty insurer’s subrogation right of reimbursement is not prejudiced by its insured’s release of any tortfeasor when the settlement documents and release preserve those same rights under HRS § 663-10. Finally, the court declined to apply the made whole doctrine to the statutory lien-claim process established by HRS §§ 431:13-103(a)(10) and 663-10 under the circumstances of this mass tort case. View "In re: The Petition for the Coordination of Maui Fire Cases. S.Ct. Order" on Justia Law

Shelby Roberts rented an apartment from Ansley at Roberts Lake Apartments. After a dispute over the lease termination, Ansley retained her $500 security deposit and sent her an invoice for $791.14 for additional damages. Roberts believed these charges were fabricated and refused to pay. Ansley referred the debt to Carter-Young, a collection agency, which reported the debt to credit reporting agencies. Roberts disputed the debt, but Carter-Young only confirmed the debt with Ansley without further investigation. Roberts sued Carter-Young for failing to conduct a reasonable investigation under the Fair Credit Reporting Act (FCRA).The United States District Court for the Middle District of North Carolina dismissed Roberts' claim, stating that her dispute involved legal, not factual, matters, and thus did not require Carter-Young to investigate under the FCRA. The court held that the FCRA did not mandate investigations into legal disputes.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court held that to state a claim under the FCRA, a plaintiff must allege facts showing that the information in their credit report is inaccurate or incomplete and that this inaccuracy is objectively and readily verifiable by the furnisher. The court found that both legal and factual disputes could form the basis of a claim if they meet this standard. The Fourth Circuit vacated the district court's dismissal and remanded the case for further proceedings to determine if Roberts' allegations met the new standard of being objectively and readily verifiable. View "Roberts v. Carter-Young, Inc." on Justia Law

Susan Carpenter, as trustee for the H. Joe King, Jr. Revocable Trust, sold two properties in North Carolina in April 2020. Both properties were part of homeowners’ associations managed by William Douglas Management, Inc. Carpenter paid fees for statements of unpaid assessments required for the sales, which she claimed were excessive under North Carolina law. She filed a class action lawsuit against William Douglas and NextLevel Association Solutions, Inc., alleging violations of state laws, including the prohibition of transfer fee covenants, the Unfair and Deceptive Trade Practices Act, and the Debt Collection Act, along with claims of negligent misrepresentation, unjust enrichment, and civil conspiracy.The case was initially filed in North Carolina state court but was removed to the United States District Court for the Western District of North Carolina. The district court dismissed Carpenter’s complaint for failure to state a claim, concluding that the fees charged were not transfer fees as defined by state law and that the companies were not deceptive or unfair in charging them.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court affirmed the district court’s dismissal, holding that the fees charged for the statements of unpaid assessments did not qualify as transfer fees under North Carolina law. The court also found that the fees were not unfair or deceptive under the Unfair and Deceptive Trade Practices Act. Consequently, Carpenter’s additional claims of unjust enrichment, violation of the Debt Collection Act, negligent misrepresentation, and civil conspiracy were also dismissed, as they were contingent on the success of her primary claims. View "Carpenter v. William Douglas Management Inc" on Justia Law

John Doe was found not guilty by reason of insanity (NGRI) for an offense in Arlington County, Virginia, in 2014 and was committed to a state hospital in 2015. After his first job offer was rescinded due to his arrest and commitment, he changed his legal name and moved to Texas in 2020. In 2022, he was arrested based on a Virginia bench warrant for failure to appear but was released when Virginia declined extradition. In 2023, Doe received a job offer from Charter Communications, pending a background check by HireRight. HireRight reported that Doe had a criminal record and an active warrant, leading Charter to rescind the job offer.Doe filed a pro se civil rights action under 42 U.S.C. § 1983 against Charter, HireRight, and Paul Ferguson, Clerk of the Circuit Court of Arlington County, Virginia, alleging violations of the Fair Credit Reporting Act (FCRA), the Americans with Disabilities Act (ADA), and the Fourteenth Amendment. The United States District Court for the Western District of Texas dismissed Doe’s claims, finding that his FCRA claim against Charter was barred as there is no private right of action against users of consumer reports, and his Fourteenth Amendment claim against Ferguson was duplicative of a previously litigated case in Virginia.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court’s dismissal. The appellate court agreed that Doe’s constitutional claims against Ferguson were duplicative and therefore frivolous. It also upheld the dismissal of Doe’s FCRA claim against Charter, interpreting 15 U.S.C. § 1681m(h)(8) to bar private enforcement of section 1681m in its entirety. The court found that Doe’s FCRA claim against HireRight and ADA claim against Charter were based on the allegation that the warrant was unlawful or inaccurate, which had already been addressed in the Virginia litigation. View "Doe v. Charter Communications" on Justia Law

The case involves a dispute over the lease of a commercial property that has lasted nearly eight years. The plaintiff brought claims against the defendants for breach of contract, breach of the implied covenant of good faith and fair dealing, and a violation of G. L. c. 93A. The plaintiff prevailed at trial and was awarded a monetary judgment of over $20 million. The defendants paid the full amount of the judgment but notified the plaintiff that they intended to exercise their appellate rights.The Superior Court initially handled the case, and the plaintiff prevailed. The defendants appealed, and the Appeals Court affirmed the judgment. The defendants then sought further appellate review, which the Supreme Judicial Court granted, limited to issues related to postjudgment interest.The Supreme Judicial Court of Massachusetts reviewed the case and held that the exercise of appellate rights does not constitute a condition on the payment of a judgment. Therefore, the judgment was fully satisfied when it was paid in full, and the accrual of postjudgment interest halted upon payment. The court concluded that postjudgment interest is meant to compensate the prevailing party for the loss of the use of money when damages are not paid on time, not to punish or discourage appeals. The court reversed the portion of the lower court's order that allowed for the accrual of postjudgment interest after the defendants' payment in full. View "H1 Lincoln, Inc. v. South Washington Street, LLC" on Justia Law

Tiffany Johnson and Tracy Crider, Maryland residents, obtained credit card accounts from Continental Finance Company, LLC and Continental Purchasing, LLC. They filed separate class-action lawsuits in Maryland state court, alleging that Continental violated Maryland usury laws by charging excessive interest rates through a "rent-a-bank" scheme. They sought statutory damages and declaratory judgments to void their loans. Continental removed the cases to the District of Maryland and moved to compel arbitration based on a cardholder agreement containing an arbitration provision.The District of Maryland consolidated the cases and denied Continental's motions to compel arbitration. The court held that it was responsible for determining whether the arbitration agreement was illusory, not the arbitrator. It also found that the choice-of-law provisions in the agreements could not be applied before establishing the existence of a valid contract. Finally, the court concluded that the arbitration agreement was illusory under Maryland law due to a "change-in-terms" clause allowing Continental to unilaterally alter any term at its sole discretion.The United States Court of Appeals for the Fourth Circuit reviewed the case and affirmed the district court's decision. The Fourth Circuit agreed that the court, not the arbitrator, should determine the contract's formation. It also concurred that the choice-of-law provisions could not be enforced before establishing a valid contract. Finally, the court held that the arbitration agreement was illusory under Maryland law because the change-in-terms clause allowed Continental to escape its contractual obligations, rendering the agreement non-binding. The judgment of the district court was affirmed. View "Johnson v. Continental Finance Co., LLC" on Justia Law

The case involves the Consumer Product Safety Commission's (CPSC) second attempt to regulate small, high-powered magnets that pose serious health risks to children when ingested. These magnets, used in various consumer products like jewelry and puzzles, can cause severe internal injuries or death if swallowed. The CPSC's first attempt to regulate these magnets was struck down by the Tenth Circuit in 2016 due to inadequate data supporting the rule. The CPSC then revised its approach and issued a new rule, which is now being challenged by industry groups.The industry groups petitioned for review of the CPSC's new rule, arguing that the CPSC's cost-benefit analysis was flawed and that the rule was promulgated by an unconstitutionally structured agency. They contended that the CPSC's data on magnet ingestions was unreliable, that the CPSC failed to consider the impact of its own enforcement efforts, and that the rule was underinclusive and arbitrary. They also argued that existing voluntary standards were sufficient to address the risks posed by the magnets.The United States Court of Appeals for the Tenth Circuit reviewed the case. The court found that the CPSC's rule was supported by substantial evidence, noting that the CPSC had adequately addressed the shortcomings identified in the previous case and had conducted a thorough cost-benefit analysis. The court also held that the CPSC's structure, which includes removal protections for its commissioners, was constitutional, reaffirming its previous decision in Leachco, Inc. v. Consumer Product Safety Commission.The Tenth Circuit denied the petition for review, upholding the CPSC's rule regulating small, high-powered magnets. The court concluded that the rule was necessary to address the significant health risks posed by these magnets and that the CPSC had acted within its authority in promulgating the rule. View "Magnetsafety.org v. Consumer Product Safety Commission" on Justia Law

The plaintiff, Katherine Chabolla, purchased a one-month subscription from ClassPass, a company offering access to gyms and fitness classes, in January 2020. Due to the COVID-19 pandemic, ClassPass paused charges but resumed them when gyms reopened. Chabolla filed a lawsuit alleging that ClassPass violated California’s Automatic Renewal Law, Unfair Competition Law, and Consumers Legal Remedies Act by resuming charges without proper notice.The United States District Court for the Northern District of California denied ClassPass’s motion to compel arbitration, which argued that Chabolla had agreed to arbitrate any claims by using their website. The district court found that the website did not provide reasonably conspicuous notice of the Terms of Use, which included the arbitration clause, and that Chabolla did not unambiguously manifest assent to those terms.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court’s decision. The court held that ClassPass’s website, which resembled a sign-in wrap agreement, did not provide reasonably conspicuous notice of the Terms of Use on the landing page or the first screen. Even if the second and third screens provided such notice, Chabolla did not unambiguously manifest her assent to the Terms of Use on those screens. The court concluded that Chabolla’s use of the website did not amount to an unambiguous manifestation of assent to the Terms of Use, and therefore, she was not bound by the arbitration clause within those terms. The court affirmed the district court’s order denying ClassPass’s motion to compel arbitration. View "CHABOLLA V. CLASSPASS, INC." on Justia Law